Vietnam’s leaders are forecasting strong economic growth even as the government will fail to meet a 2015 goal of restructuring nearly 300 state-owned companies.

The government expects gross domestic product expansion of 6.7 percent next year, a rise from 6.5 percent in 2015, Prime Minister Nguyen Tan Dung said in a speech to parliament Tuesday. Vietnam is targeting average economic growth of 6.5 percent to 7 percent from 2016 to 2020. Inflation this year is expected to be two percent, the lowest in 15 years, he said.

Vietnam’s economic expansion next year would be at the fastest pace in 9 years, girded by strong exports and foreign investments. A cloud over the country’s economic picture is public debt and the government’s failure to meet its goal to privatize 289 state companies this year. The government expects to sell shares in just 200 state enterprises this year, Dung said. It plans to reduce the budget deficit to 4.95 percent of GDP next year from 5 percent this year.

Economic reform

“Economic reform is still slow,” Dung said. “Restructuring, overhauling of state companies in agriculture is slow and missing the target. Macro-economic stability is not sustainable with the budget deficit remaining at a high level and public debt rising quickly.”

The government remains committed to privatizing state-owned companies, he said.

“After being privatized, companies have stronger financial capabilities, better corporate governance and are more efficient,” Dung said. “Financial reports of 2,400 companies one year after being privatized show their revenues increased by 34 percent and after-tax profit rose 99.9 percent.”